President's Debt Panel Proposal

[Perchoutofwater]

U.S. Debt Proposal Would Cut Social Security, Taxes, Medicare

By Heidi Przybyla and Brian Faler - Nov 10, 2010 12:55 PM CT

 

A presidential commission’s leaders proposed a $3.8 trillion deficit-cutting plan that would cut Social Security and Medicare, reduce income-tax rates and eliminate tax breaks including the mortgage-interest deduction.

 

The co-chairmen of the panel appointed by President Barack Obama suggested reducing Social Security spending by raising the retirement age to 68 in about 2050 and 69 in about 2075. The plan also would slow the rate at which benefits grow. The savings would come between 2012 and 2020.

 

“This country’s out of money and we better start thinking,” said co-chairman Erskine Bowles. Without “tough choices,” he said, “we’re on the most predictable path toward an economic crisis that I can imagine.”

 

Bowles, former President Bill Clinton’s chief of staff, and Republican former Senator Alan Simpson of Wyoming announced the proposal in Washington today, stressing that it was intended as a starting point for discussion.

 

None of the proposals would take effect next year to avoid disrupting the economic recovery. Bowles said income-tax rates would be reduced to three levels: 8 percent, 14 percent and 23 percent.

 

Wiping out all tax breaks, including the home mortgage deduction, while lowering rates would save $100 billion a year, Bowles said. Members of the panel could decide to keep some tax breaks by offering offsetting cuts, he said.

 

Bowles said about three-fourths of the savings would come from spending cuts with the remainder from tax increases.

 

‘Harpooned Every Whale’

 

“We have harpooned every whale in the ocean and some of the minnows,” Simpson said. “No one has done this before.”

 

The proposal would attempt to slow health-care costs by paying doctors participating in Medicare less, and it calls for “comprehensive” legislation to reduce medical malpractice costs.

 

Discretionary spending cuts in the plan include reducing congressional and White House budgets by 15 percent, freezing federal salaries and cutting the federal workforce by 10 percent. The discretionary reductions of $1.4 trillion would be split equally between defense and domestic programs, Bowles said.

 

“The cuts really will happen on both sides of that firewall,” he said.

 

The plan would cut the deficit to 2.2 percent of gross domestic product by 2015, from the current 9 percent, exceeding Obama’s goal. It would also reduce debt to 60 percent of GDP by 2024.

 

“This is Al’s and my proposal, nobody else’s,” Bowles said. “The president hasn’t seen this proposal.” Some members of Obama’s financial team have seen the plan and they liked some things and not others, he said.

 

Bloomberg

 

For the most part this is something I could get behind. I'd rather see the SS age rise faster and higher. Something like raising the age by one year ever other or every third year until the ages is closer that the 75 to 80. I'd also like to see tax deductions to charities continued, though those were not specifically mentioned in the article as being removed, I think it is important to keep them. Obviously I'd rather see a flat tax or a sales tax, but his is progress. If they cut doctors medicare reimbursements I think they need to maker sure that they do something about the cost of medical malpractice, which it appears as though they are going to do. Obviously we need more details, but from what I've read it makes sense. It isn't all that I would hope for, but it is a very good start.

[Perchoutofwater]

More on it.

 

Panel Chairmen Recommend Cutting Federal Spending by $200 Billion

 

By COREY BOLES And MARTIN VAUGHAN

 

WASHINGTON—The co-chairs of a deficit commission established by the White House would seek to limit federal spending on health care, gradually raise the retirement age and lower the corporate tax rate to 26%, according to a draft set of proposals released Wednesday.

 

The sweeping plan is likely to provoke a political firestorm. It touches many of the third rails of politics, including defense spending, Social Security and middle-class tax breaks long seen as inviolate.

 

It isn't a final document. The co-chairs—Erskine Bowles, a chief of staff in the Clinton White House, and former Republican Sen. Alan Simpson of Wyoming—presented the draft plan to members of the 18-strong committee earlier Wednesday. It was presented as a series of options that could be taken together or considered individually as a ways to bring down federal spending.

 

Members of the panel emerged from the meeting saying they thought the proposals were "provocative," but they failed to endorse them outright.

 

According to the draft, the plan identifies $200 billion in discretionary-spending cuts by 2015, with half the savings from reductions to spending by the Pentagon. It would place limits on tax breaks for homeowners by removing deductions of interest on second homes, home-equity loans and mortgages worth more than $500,000.

 

For businesses, it would lower the corporate tax rate but remove a number of deductions currently available. It would make permanent the research-and-development tax credit.

 

The federal gasoline-tax rate would start to increase from 2013, increasing by 15 cents a gallon at that stage.

 

Federal subsidies to agribusinesses would begin to be slashed by $3 billion a year.

 

On Social Security, it would gradually increase the retirement age when people can start receiving benefits to 68 at around 2050 and to 69 by 2075.

 

It would combine a cut in benefits with an increase in taxes levied on wealthier seniors' benefits.

 

The savings would be phased in over time and include a freeze on salaries and bonuses paid to federal employees for three years, at a savings of $15.1 billion by 2015.

 

It would propose cutting the federal work force by 10% for a further savings of $13.2 billion by 2015.

 

It would seek to rein in federal spending on health care, both by introducing further proposed changes, including reform of tort law, and by seeking to slow the growth of the Medicare program.

 

The panel co-chairs proposed establishing a committee to identify further budgetary cuts going forward.

 

"This is really a starting point, and it's an honest starting point," Sen. Richard Durbin (D., Ill.) told reporters during a break in panel deliberations.

 

"I told them that there are things in there that inspire me, and there are things in there that I hate like the devil hates holy water. I'm not going to vote for this thing," Durbin said.

 

Mr. Durbin is one of 18 members of the deficit-reduction commission that is to make recommendations by Dec. 1.

 

Panel members were expected to continue meeting Wednesday and hold meetings next week aimed at narrowing differences.

 

Another member of the panel, Rep. Jan Schakowsky (D., Ill.), said she is encouraged that a proposal was put on the table that would restore Social Security to long-term solvency. At the same time, she said it was "not a proposal that I could support right now."

 

"This is a serious and impressive effort," said Rep. Paul Ryan (R., Wis.). "It's a good start.

 

The panel would need 14 of 18 members to agree on a plan for it to receive an automatic vote from Congress.

 

The panel was established by the president to discuss longer-term overhauls to federal spending that are seen by economists as necessary to bring the federal debt back to managable levels.

 

The panel was told to come up with a proposal that would bring the federal budget deficit back to about 3% of U.S. gross domestic product by 2015, compared with 8.9% in fiscal 2010, which ended on Sept. 30.

 

WSJ

 

It appears for the most part that the Republicans like it. In addition to Paul Ryan saying "It is a good start", Judd Gregg also likes it according to another article I've read. It also appears as the Democrats don't care for it too much.

[Square]

Bloomberg

 

For the most part this is something I could get behind. I'd rather see the SS age rise faster and higher. Something like raising the age by one year ever other or every third year until the ages is closer that the 75 to 80.

You realize that the average American only lives to about 76 right? WThell would justify having the SS age rise to 75 or 80? So I can pay into a bad savings account that is robbed by every administration and replaced with an IOU so at least half of the people will die before they withdraw a cent? Genius perch. Why don't we talk about cutting military spending. As we could reduce that by 50% and still have the most expensive military on the planet.

[Duchess Jack]

In addition to Paul Ryan saying "It is a good start"...

 

I hate that comment. Its used a lot. I see politicians do it when they 'should' like something, but don't want to give the person proposing it credit. Its kind of like saying - you have moved in my direction, but you don't agree 100% with what I want. Too much compromise in your idea. Come the rest of the way to exactly what I want and I will give you credit.

[Azazello1313]

more details here

 

I pretty much like all of it. the only thing that worries me a bit is how they seem to be approaching controlling health care costs. as I've said many times, I think there are two main approaches to controlling health care costs: one is implementing price controls and rationing via greater government control, the other is removing all of the tax shelters and weird incentives which keep individuals so completely isolated from the costs and benefits of their own health care decisions. the things they talk about here seem to follow the first approach, and I think that is the wrong one.

[Perchoutofwater]

You realize that the average American only lives to about 76 right? WThell would justify having the SS age rise to 75 or 80? So I can pay into a bad savings account that is robbed by every administration and replaced with an IOU so at least half of the people will die before they withdraw a cent? Genius perch. Why don't we talk about cutting military spending. As we could reduce that by 50% and still have the most expensive military on the planet.

 

Did you read what was proposed? It had significant cuts to military spending. Also SS as it was originally intended was a safety net, not a retirement account. Upping the age to where the average person dies puts it back in the realm of a safety net rather than a retirement account. Additionally if trends continue people will continue to live longer and longer. To go from 66 no to 76 based on what I was proposing would take 20 to 30 years depending on whether you increased the age every other or every third year. Either way it basically ensures I'd probably never see a dime, which I'm ok with.

[Perchoutofwater]

I hate that comment. Its used a lot. I see politicians do it when they 'should' like something, but don't want to give the person proposing it credit. Its kind of like saying - you have moved in my direction, but you don't agree 100% with what I want. Too much compromise in your idea. Come the rest of the way to exactly what I want and I will give you credit.

 

He also said it was "a serious and impressive effort". Based on what I know of Ryan he wants it to be more serious and more impressive. Have you read his road map? Regardless what he is saying beats the hell out of what Dick Turban and Jan Schakowsky from the other side are saying.

[Azazello1313]

You realize that the average American only lives to about 76 right? WThell would justify having the SS age rise to 75 or 80? So I can pay into a bad savings account that is robbed by every administration and replaced with an IOU so at least half of the people will die before they withdraw a cent? Genius perch. Why don't we talk about cutting military spending. As we could reduce that by 50% and still have the most expensive military on the planet.

 

I think their main point is that the retirement age should be indexed to life expectancy. nobody is talking about 75 or 80...they are talking about 68 or 69, and then changes from there based on changes in life expectancy.

[untateve]

I think their main point is that the retirement age should be indexed to life expectancy. nobody is talking about 75 or 80...they are talking about 68 or 69, and then changes from there based on changes in life expectancy.

 

It's not nice to call Perch a "nobody."

[Perchoutofwater]

I think their main point is that the retirement age should be indexed to life expectancy. nobody is talking about 75 or 80...they are talking about 68 or 69, and then changes from there based on changes in life expectancy.

 

In fairness, while the politicians may not be talking about that, I was. I think it should be a true safety net, not a retirement program. If you live longer than expected and deplete your retirement then it should kick in. At least that is what I expressed as my desire. You are correct in what you are stating the politicians are proposing.

[bpwallace49]

It is a very good start.

 

Which means it will be bastardized beyond recognition as the politicians look to mollify their constituencies, and will never pass.

[Duchess Jack]

He also said it was "a serious and impressive effort". Based on what I know of Ryan he wants it to be more serious and more impressive. Have you read his road map? Regardless what he is saying beats the hell out of what Dick Turban and Jan Schakowsky from the other side are saying.

 

Wow. My comment was about politicians in general and their double speak. Not left or right or anything like that. Please understand that I dislike the left's leadership almost as much as your typical Rush fan - if only because they keep food in that dbags belly and make give the far right ammo. I don't dislike them enough to force them into a conversation not dealing with them or dislike them enough to get all cutesy with the spelling of their names - but I do tend to be a little more moderate in my hate.

[Perchoutofwater]

Wow. My comment was about politicians in general and their double speak. Not left or right or anything like that. Please understand that I dislike the left's leadership almost as much as your typical Rush fan - if only because they keep food in that dbags belly and make give the far right ammo. I don't dislike them enough to force them into a conversation not dealing with them or dislike them enough to get all cutesy with the spelling of their names - but I do tend to be a little more moderate in my hate.

 

Sorry, but you typically line up a little left of center, and you take exception to Ryan's somewhat upbeat comment, but don't even comment on the immovable comments from Durban and Schakowsky. Maybe it was an overreaction on my point.

[TimC]

I think their main point is that the retirement age should be indexed to life expectancy. nobody is talking about 75 or 80...they are talking about 68 or 69, and then changes from there based on changes in life expectancy.

 

No one has ever explained to my satisfaction why winning a DNA lottery is a good thing.

[Duchess Jack]

Sorry, but you typically line up a little left of center, and you take exception to Ryan's somewhat upbeat comment, but don't even comment on the immovable comments from Durban and Schakowsky. Maybe it was an overreaction on my point.

Sure, I line up left of center, but I have quite a bit of traditionally right wing views. Not enough to put me dead center or right of it - but more than more than your typical 'leftist' might.

 

and to be completely honest, I didn't even read the article. It was the quote you posted from Ryan that motivated me to reply. I am not sure what Durban or Schakowsky said - but I am pretty sure that if its hardline and tending toward the extreme (again - the things that make me hate the lefts leadership) that I'd likely agree with you.

[bpwallace49]

Sorry, but you typically line up a little left of center, and you take exception to Ryan's somewhat upbeat comment, but don't even comment on the immovable comments from Durban and Schakowsky. Maybe it was an overreaction on my point.

 

That is pretty dumb Perch . . Ryan could be just as opposed, but is choosing to not voice that as of yet. It is WAAAYY too early in the process for you to start counting coup according to your partisan affiliation.

[Perchoutofwater]

That is pretty dumb Perch . . Ryan could be just as opposed, but is choosing to not voice that as of yet. It is WAAAYY too early in the process for you to start counting coup according to your partisan affiliation.

 

My aunt could be my uncle but has choose not to show anyone her twig and berries too.

 

"This is a serious and impressive effort," said Rep. Paul Ryan (R., Wis.). "It's a good start." What more do you want? I'm sure there are provisions he'd love to change, but at least it sounds like he is supporting the effort as is Judd Gregg which is more than can be said for the two Democrats quoted.

:middlefinger:

[bpwallace49]

My aunt could be my uncle but has choose not to show anyone her twig and berries too.

 

"This is a serious and impressive effort," said Rep. Paul Ryan (R., Wis.). "It's a good start." What more do you want? I'm sure there are provisions he'd love to change, but at least it sounds like he is supporting the effort as is Judd Gregg which is more than can be said for the two Democrats quoted.

:middlefinger:

 

Perch . . you are reading WAAYY too much into this (but as you are doing so to support your right affiliation, I am not surprised)

 

Cant you at least TRY and wait for some harder evidence of people blocking it before you start grasping at small snippets of soundbites? There will be PLENTY of fingers to point when this comes to a vote in front of the economic advisory panel.

[muck]

kum-bah-yah

[Perchoutofwater]

Perch . . you are reading WAAYY too much into this (but as you are doing so to support your right affiliation, I am not surprised)

 

Cant you at least TRY and wait for some harder evidence of people blocking it before you start grasping at small snippets of soundbites? There will be PLENTY of fingers to point when this comes to a vote in front of the economic advisory panel.

 

Did you read what Durban and Schakowsky are quoted as saying?

[Azazello1313]

pretty funny how this thread devolves from a discussion of substance into calling perch a d00sh hack for simply offering a very supportive quote from paul ryan.

 

in any case, there's a lot in here the far left won't like. which means....golden opportunity for obama to move to the center and triangulate, if he is so inclined. interested to see what happens.

[Ursa Majoris]

I like most of this a lot. It is definitely heading in the right direction. I'd do more with SS, including making it the income of last resort, so you'd have to spend your own money before it kicked in, which would have the happy effect of massively driving down SS tax rates.

[Yukon Cornelius]

I like most of this a lot. It is definitely heading in the right direction. I'd do more with SS, including making it the income of last resort, so you'd have to spend your own money before it kicked in, which would have the happy effect of massively driving down SS tax rates.

socialist pig

[Ursa Majoris]

socialist pig

Yeah, I know, I'm such a lefty.

[CaP'N GRuNGe]

I'm all in for some pretty radical tax and spending changes. It's time.